Leong Mun Wai on Central Provident Fund (Amendment) Bill

Local professionals have been made less competitive than foreign professionals after the rules were changed in 1995 to exempt all foreigners, including Employment Pass (EP) holders, from CPF contributions. NCMP Leong Mun Wai said this in Parliament on Monday (Nov 6), noting that the number of EP holders in Singapore had increased substantially since then. He said it was a “win-win” for both employers and EP holders and, with foreign professionals having to be paid less without CPF contributions, they were “being used as low-cost labour”, depressing the wages of local counterparts. Mr Leong spoke during the debate on a Bill that would terminate the participation of non-Singapore residents in CPF schemes. He suggested two solutions. First, he reiterated his call for a S$1,200 monthly levy on EP holders to “level the playing field”. Second, he said Singaporeans must be allowed to earn higher returns on their CPF balances. He asked why the Lifetime Retirement Investment Scheme had yet to be implemented even though the Government accepted a recommendation for the scheme in 2016. Alternatively, he said the Government should increase the interest rates on CPF accounts. This was possible, he said, because sovereign wealth fund GIC returns more than four per cent a year, so the Government should share more of the differential between what it earns from those returns and what it pays Singaporeans in CPF interest.